Since 2018, amendments to the Financial Services Act have come into force in Gibraltar, according to which blockchain service providers (DLT – distributed ledger technology) are required to be licensed. This step was very important for this jurisdiction on the way to normalizing the cryptocurrency market. The crypto license in Gibraltar is designed to ensure the security, integrity, and transparency of this area, as well as to stimulate foreign investment and the development of the fintech sector.

 

In terms of attractiveness for IT business, Gibraltar is among the top countries. Fintech companies here are able to enjoy optimal conditions for comfortable business operations, including low tax rates and corporate tax exemption (12.5%). In combination with crypto licensing, this makes this jurisdiction one of the best options for all entrepreneurs who want to engage in legal crypto business. Gibraltar is especially popular among young projects, as it is much easier to launch a business based on blockchain technology.

 

If you are interested in obtaining a crypto license in Gibraltar, then we recommend that you take the help of experienced lawyers and attorneys of Lawrange Law Firm. One of the areas of our activity is working with cryptocurrency projects. Preparation for opening a company, registration of a legal entity, licensing and further business support – these and other services are provided by highly qualified specialists at reasonable prices on completely transparent terms.

 

Advantages of obtaining a license in Gibraltar

The authorization document for conducting DLT activities in this jurisdiction is issued by the Financial Services Commission (GFSC). To create and license an ICO platform or, for example, a cryptocurrency exchange in Gibraltar, you will have to spend a lot of time and effort. The Commission thoroughly checks each applicant for several months, including requiring constant interaction and compliance with certain criteria. However, despite this, cryptocurrency businesses are massively registered in this jurisdiction, which is associated with various advantages.

 

Clear tax system

Attractive tax conditions greatly facilitate the process of conducting crypto activities with the appropriate Gibraltar license. Foreign entrepreneurs are exempt from tax when investing in cryptocurrencies:

 

  • income tax;
  • capital gains tax;
  • on dividends;
  • by interest.

 

All this, together with comfortable reporting conditions, is considered by many investors as one of the main advantages of the jurisdiction.

 

Well-designed cryptocurrency legislation

Local regulation is designed to ensure the safety and protection of investors by creating all the necessary conditions to prevent fraud, terrorist financing, and any other unfair practices. Companies wishing to develop the local cryptocurrency market have clear rules and instructions to ensure business transparency. At the legislative level, investors are protected from the risks of crypto volatility. At the same time, current laws are aimed at enhancing the development of innovative technologies, which creates favorable conditions for attracting foreign investment.

 

Strong infrastructure and innovative ecosystem

Powerful infrastructure tools are used to support the cryptocurrency business in this jurisdiction – the banking, legal, and accounting environment is well acquainted with the blockchain sector. At the same time, cryptocurrency companies are actively encouraged by the state through various financial and resource support for the development of advanced technologies.

 

Prestige and access to new markets

Gibraltar is considered a prestigious offshore jurisdiction that attracts major players in the cryptocurrency industry. This jurisdiction has a clean reputation as one of the leading offshore financial centers in the world, which creates excellent prospects for the development of crypto business. A former member of the EU, Gibraltar can still offer foreign crypto enthusiasts free access to a wide European client base.

 

Peculiarities of cryptocurrency regulation in Gibraltar

In 2018, Gibraltar became one of the first countries in the world to adopt and implement distributed ledger technologies (DLT Framework). At the same time, the main legal act regulating this type of economic activity is the Financial Services Act, which provides for the need to license cryptocurrency companies. Thus, the government has managed to create an effective and secure legal environment in the blockchain sphere. This regulatory framework allows Gibraltar to be positioned as a jurisdiction that encourages an innovative approach while supporting the country’s strategic goals in general. Its adoption and implementation in practice means that the rapidly developing cryptocurrency sector requires effective interaction with regulators.

 

The Gibraltar Financial Services Commission (GFSC) is responsible for issuing licenses under the Cryptocurrency Law of 2018. Among other things, it specifies the need for market participants to comply with 10 principles of crypto business regulation. All DLT providers are required to conduct economic activities in good faith and honesty.

 

According to the Financial Services Act, cryptocurrency companies must obtain a cryptocurrency license in Gibraltar. A DLT provider license is an authorization document issued in accordance with Article 8 of the above law to legally conduct activities related to the provision of distributed ledger technology services. The licensing process involves a thorough assessment of the business model, security measures, and compliance procedures.

 

Despite Gibraltar’s exit from the European Union along with the UK, its AML regulations continue to comply with the EU’s 5th and 6th Anti-Money Laundering Directives (AMLD5 and AMLD6). This means that cryptocurrency companies registered in Gibraltar must comply with the proven competence of senior management and implement due diligence procedures, as well as other internal policies aimed at identifying and mitigating risks.

 

In addition to the special regulation of cryptocurrencies in the form of the Financial Services Law, cryptocurrency transactions in this country are also subject to regulation under other legal acts:

 

  • The Proceeds of Crime Act (2015, updated in March 2021) defines the measures that can be taken to combat financial crime. It requires cryptocurrency companies to implement robust anti-money laundering and customer identification (AML and KYC) procedures to prevent illegal financial activities.
  • The Law on Data Protection (2004) – defines the need to ensure the confidentiality and security of personal data that is collected and processed in the framework of any financial activity, including cryptocurrency.
  • Companies Act (2014) – sets out a list of registration, corporate governance and reporting requirements for companies operating in Gibraltar.
  • Consumer Protection Legislation – guarantees adequate information about customer protection when conducting cryptocurrency transactions or using crypto services.
  • Intellectual Property Regulation (2021) – relevant for cryptocurrency companies interested in protecting their own technologies, trademarks or other intellectual assets.

 

It is important for crypto firms to comply with the laws and regulations applicable to their operations. The GFSC and other regulatory authorities responsible for monitoring and enforcing these laws ensure that the blockchain market in this jurisdiction is maintained in a secure manner.

 

The process of obtaining a crypto license in Gibraltar

The licensing procedure takes place in several stages, the first of which is preparatory. It is important for an entrepreneur to decide on a business strategy, i.e. to understand what types of services the future company is going to provide and what operational and technological models will be used.

 

In addition, when preparing to apply for cryptocurrency authorization in Gibraltar, several consultations should be held with the GFSC. This will allow you to establish contact with the Regulator, discuss plans, business model, and receive important recommendations regarding the licensing procedure.

 

Determining the legal form of the company

You need to determine what type of company you will register. Popular options among foreign investors include LTD (private limited liability company) and partnerships. In the first case, you will need a relatively small amount of start-up capital. This form provides for the possibility of hiring at least one shareholder and a sole director. When choosing a partnership, the participants are not limited to any liability in case of insufficient funds to repay debts to creditors.

 

Registration of a company

In addition to approving the name, you need to:

 

  • Prepare a Memorandum and Articles of Association.
  • Appoint a director and secretaries.
  • Hold the first meeting of the board of directors.
  • Register a legal address in Gibraltar.
  • Pay the statutory fees and authorized capital.
  • Submit an application for company registration.

 

After the Regulator starts considering your application, you need to wait for its verdict. As a rule, company registration takes no more than 2 weeks.

 

Submitting an application for licensing

A license to trade cryptocurrencies in Gibraltar is issued to entrepreneurs who submit the following documents to the Regulator along with the application:

 

  • A business plan describing the company’s goals and business model, as well as its development strategy. It is important to demonstrate the key aspects.
  • Description of internal processes and procedures (in a presentational form) – among other things, this includes familiarizing the GFSC with risk and security management methods.
  • AML/KYC policies and regulations, which are proof of compliance with the legislation on the prevention of financial fraud and terrorist financing.
  • Financial statements with forecasts – if you need a cryptocurrency license in Gibraltar, then you need to explain to the Regulator where the company’s money comes from and how you plan to increase revenue.

 

The list of other documents also includes information on the competence of the founders and directors, provided by:

 

  • a certified copy of the identity card;
  • a certified copy of the document confirming the place of residence (for example, utility bills);
  • a certified bank statement;
  • two professional letters of recommendation;
  • confirmation of the source of funds;
  • certified proof of no criminal record;
  • a resume indicating previous employment;
  • certified copies of educational diplomas.

 

Specific requirements, procedures and fees may be subject to change from time to time. Therefore, it is recommended that you contact the GFSC or Lawrange directly for up-to-date information and guidance on licensing.

Order a consultation

 

Types of crypto licenses in Gibraltar

There are three types (categories) of licenses in this jurisdiction. The choice of a specific type of this permit depends on the scale of the project and the specifics of its activities. Each category of license requires a separate amount of annual fees. Based on this, you can apply for a crypto license in Gibraltar to open a business:

 

  • Simple blockchain projects, while the amount of annual fees is about 11,600 euros.
  • ICO platforms, paying about 23200 euros annually.
  • Crypto exchanges and exchanges with an annual fee of 34,800 euros.

 

The requirements for crypto companies

This jurisdiction does not impose complex requirements for licensing crypto firms. Working honestly and openly, you will definitely be able to avoid problems with the law.

 

The main requirements for those wishing to register a crypto license in Gibraltar include:

 

  • The need to take a number of actions to combat money laundering.
  • An effective internal control policy for operations with crypto assets is required.
  • Conducting an adequate risk assessment and implementing measures to reduce such risks.
  • The need to appoint a person who would be responsible for compliance with the current rules.
  • Obligatory informing clients about the existing procedures for compliance, control and work with personal client data.
  • Registration and record keeping of all current transactions with crypto assets.
  • A good level of software security.
  • Availability of a contingency plan in case of unforeseen circumstances.
  • Effective corporate governance.
  • A high level of attention to the interests of clients and partners.

 

The local government understands that crypto business is associated with many risks. Therefore, the company must be able to protect the interests of customers in any case. If you establish a reliable system of security for personal data and financial assets, licensing in Gibraltar will be relatively easy and fast.

 

You should also hire people with relevant work experience, good education, and an understanding of the principles of cryptocurrency projects. In general, the regulation of the cryptocurrency sphere is designed to promote the development of small and medium-sized businesses. Therefore, it does not establish rules that could hinder the growth of such businesses.

 

Tax policy for crypto companies in Gibraltar

Cryptocurrencies are not taxed in this jurisdiction. All cryptocurrency companies that are residents need to carry out their activities in accordance with the general principles of taxation, namely, do not forget about regular and timely payment:

 

  • corporate tax (STI) – 12.5%;
  • social insurance – 20%;
  • stamp duty (SD) – a set rate of 0-3% for real estate or £10 (about 12 euros) per share.

 

The tax regime ultimately depends on the nature of the company’s economic activity and its status. A company acquires the status of a tax resident if it is managed and controlled in Gibraltar or outside the jurisdiction, but by permanent residents of Gibraltar.

 

Corporate tax is levied on profits derived from income in Gibraltar. If your income-generating economic activity is conducted outside of this jurisdiction, then the said tax does not apply to the crypto company. If a business has been crypto-licensed in another country, but then you decide to register a crypto license in Gibraltar, the company’s income is automatically considered to be a local source and, therefore, subject to corporate taxation.

 

Why you should work with Lawrange

Our attorneys and lawyers are dedicated to their work and are focused on achieving positive results in all circumstances. We are ready to provide qualified legal assistance to anyone wishing to start a cryptocurrency business in Gibraltar, a promising prestigious jurisdiction with strong ties to the EU market. Our experts fully support the process of registration and licensing of a legal entity, providing all the necessary services, including:

 

  • Assistance in preparing a package of documents.
  • Advice on drafting a business plan, peculiarities of local legislation, taxation, tax reporting and other issues.
  • Assistance in opening a bank account, etc.

 

As a tax resident, you may be entitled to numerous benefits that can significantly facilitate the start of a young business during the first year of operation. In turn, Lawrange’s attorneys will provide you with the necessary recommendations and instructions on how to address this and other issues. Take the opportunity to start a cryptocurrency business in Gibraltar easily and comfortably – contact us now.

 

Conclusions

If you are looking for the perfect place to start a cryptocurrency business, then we recommend that you pay attention to Gibraltar. This jurisdiction has long established itself as a prestigious offshore financial sector. Recently, it has joined the list of countries that have outlined the legality of cryptocurrencies. Since 2018, cryptocurrencies have been granted legal status at the state level and the need for licensing has been approved.

 

It is beneficial to obtain a cryptocurrency license in Gibraltar for a number of reasons: clear regulation of this area, low tax burden, well-developed infrastructure, and much more. Crypto exchanges, crypto exchangers, platforms for the issuance and initial public offering of tokens can conduct legal business in the country. A simplified and cost-effective licensing process allows every entrepreneur to become a participant in this lucrative market in a few months. And when you contact Lawrange, you can count on the help of real professionals in the registration and licensing of legal entities, including abroad. We will help you launch a licensed cryptocurrency business in Gibraltar quickly, comfortably, and without unnecessary worries.

 

FAQ

What is the validity period of a cryptocurrency license in Gibraltar?

This authorization document is valid for 1 year from the date of its receipt, after which an annual paid renewal becomes possible.

 

How long does it take to obtain a cryptocurrency license in Gibraltar?

This depends on various factors, including the completeness and accuracy of the application, the complexity of the business model, and the applicant’s responsiveness to additional requirements from the Regulator. On average, the process can take from 5-7 months to 1 year.

 

What should be considered when applying for a crypto license in Gibraltar?

Gibraltar is a part of the United Kingdom, so it is not part of the EU. It is also important to take into account the need to hire resident specialists and open a local office.

 

ORDER A CRYPTO LICENSE IN GIBRALTAR telegram-icon Telegram bot for quick communication with us